Professional Services
Overhead Allocation to Engagements (Indirect Cost)
Apportioning office rent, IT, and support staff costs across client engagements using a standard overhead rate.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Engagement Overhead Cost (Allocated) | Expense (+) | 1,200.00 | - |
| Overhead Pool (Cleared) | Expense (−) | - | 1,200.00 |
💡 Accountant's Note
Indirect costs (office, IT, admin) are pooled and then allocated to engagements using a predetermined rate — often as a percentage of direct labor hours or cost. This ensures each engagement bears its fair share of the cost structure.
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